Zucker Warns Actors Strike Could Be 'Devastating'

NBC Chief Talks to IAA About Hulu.com and Chasing Digital 'Pennies'

WASHINGTON (AdAge.com) --- NBC Universal President-CEO Jeff Zucker delivered a dire warning today about the potential impact of an actors strike, saying it could be "incredibly devastating" on network TV.
Jeff Zucker
Speaking at the International Advertising Association's 41st annual World Congress in Washington this morning, Mr. Zucker said the recently ended strike by movie and television writers hurt Hollywood, the state of California and the entire TV industry. A follow-up strike by actors, he said, could cause real economic damage.

'Real impact' on TV business
"If we go through that again, I severely question both the economy, given the state of the economy we are already in, and the future on the broadcast side," he said. "The fact is I don't think it would have an impact on the film business. Our film business has prepared. But it would have a real impact on the TV business, and I don't think the economy or the TV business would be able to survive something like that."

Mr. Zucker's comments came as part of a wide ranging conversation with Michael Kassan, principal of Media Link, during the event.

Traffic on Hulu.com, the site created by News Corp. and NBC Universal to offer network TV content that went live several weeks ago, has sold out its advertising inventory, Mr. Zucker said, though more ad opportunities are being created.

He said advertisers are interested in the site because they have more assurance of the content they are getting. "Advertisers want to be on something where you know what you get and not on something where you could be advertising [next to a video of] a cat on a skateboard," he said, a clear jab at video-sharing websites such as YouTube.

He added that conversations with CBS, Disney and Viacom to join Hulu are continuing. "I am hopeful that they will be part of it in the years ahead," he said, adding that while NBC Universal has given the site exclusive rights to its content, other partners don't have to provide content to Hulu exclusively.

Still hopeful for Apple deal
Mr. Zucker said NBC was driven to create Hulu after Apple's unwillingness to set up pricing models that would value new episodes of NBC's "The Office" differently from library episodes of older shows such as "The Rockford Files." But NBC is still hopeful it can work out a content deal with Apple that reflects different pricing, much as Apple has offered for movies.

He also said that while NBC would like to offer more digital content, the economics of digital still don't adequately offset traditional pricing, which he referred to as analog. "The economics are not the same as the analog economics you get with a 30-second commercial," he said.

Digital transition
"We are in a tremendous digital transition,, the problem we face today is not that we don't want to make all of content digital -- we do -- but the economics are not there. We are cognizant that when content goes online, economics go down, but viewership goes up. The biggest concern is replacing analog dollars with digital pennies," he said.

Mr. Zucker also said NBC has so far seen little impact from the recession, but is continuing to watch the economy closely. Meanwhile, the length of the presidential election is providing NBC with some unexpected benefits both on cable and on NBC's local TV stations, especially in Philadelphia as Pennsylvania prepares for the April 22 primary.